By NICK BAKER
In the last month, the Trump administration and Republicans in Congress have begun preparing a tax cut bill that would be a huge benefit to rich people and corporations. The details are still being negotiated among the representatives of the bourgeoisie, but the basic goals are clear.
The bill would cut income taxes by $1.5 trillion over a decade, with massive tax cuts for the wealthy, while shifting the tax burden further onto the working class. The few small crumbs that it has for working people will mostly be phased out after several years—often ending up with people paying higher taxes than they do now—while tax cuts for the wealthy are immediate or phased in and permanent.
The corporate income-tax rate would immediately be cut almost in half, to just 20 percent from its current 35 percent—the largest rate cut in history, at a time when corporate income tax as a share of GDP is already at an all-time low and corporate profits are at an all-time high.
The estate tax, which affects only the richest 0.2% of Americans, would be cut immediately by doubling the amount of inherited wealth that is exempt from taxation (up to $11 million per person, $22 million for couples) and then be gradually eliminated altogether over the next six years.
Donald Trump and his family would benefit directly from many of the cuts. For example, lowering the tax rate of so-called “pass-through” corporations—whose income is taxed as part of the owner’s income, which many of Trump’s companies are—to 25% would save Trump millions every year. Repealing the Alternative Minimum Tax, a provision that counteracts the endless tax deductions taken by the wealthy, would have saved Trump $31 million in 2005, the year of his most recent leaked tax return. In addition, eliminating the estate tax would save Trump’s heirs over $1 billion in taxes.
Meanwhile, the bill offers little to workers and the middle class, who instead will bear the brunt of many of the tax increases that the bill contains to offset the massive cuts for the rich. One way it does this is by eliminating deductions and credits that primarily benefit the poor and middle class.
The deductions for student-loan interest is eliminated, as well as the deduction for medical expenses higher than 10% of a person’s income. The personal deduction of $4050 for every member of a household is replaced with a larger standard deduction, which Republicans claim is a counterweight, but which would leave many households paying more in taxes.
The bill would also raise taxes on immigrant parents by making them ineligible for the widely used child tax credit. The child tax credit, which is taken by low-income and middle-income parents, would be raised very slightly for a couple years, and then phased out altogether, in order to raise taxes on the working class right around the time that the estate tax is scheduled to be eliminated.
Photo by The Wall Street Journal: House speaker Paul Ryan touts before the media the Republicans’ plans to revise taxes.